After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,580, $4,020, and $22,460, respectively. Cash and noncash assets total $4,980 and $55,980, respectively. Amounts owed to creditors total $14,900. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $36,300, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid.

	Required:
1.	Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash distributions, divisions of loss), use a minus sign. If there is no amount to be reported for items (a) - (d), the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering "0".
2.	Assume the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency. Journalize the entries on Feb. 28 to (a) allocate the partners deficiency and (b) distribute the remaining cash. Refer to the Chart of Accounts for exact wording of account titles.

Chart of Accounts

CHART OF ACCOUNTS

Gerloff, Chu, and Jewett

General Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
113	Allowance for Doubtful Accounts
114	Interest Receivable
115	Notes Receivable
116	Inventory
117	Supplies
118	Office Supplies
119	Prepaid Insurance
120	Land
123	Building
124	Accumulated Depreciation-Building
125	Equipment
126	Accumulated Depreciation-Equipment
129	Asset Revaluations
133	Patent

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	William Gerloff, Capital
311	William Gerloff, Drawing
312	Courtney Jewett, Capital
313	Courtney Jewett, Drawing
314	Joshua Chu, Capital
315	Joshua Chu, Drawing

	REVENUE
410	Revenues
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Salary Expense
521	Advertising Expense
522	Depreciation Expense-Building
523	Depreciation Expense-Equipment
526	Repairs Expense
529	Selling Expenses
531	Rent Expense
533	Insurance Expense
534	Supplies Expense
535	Office Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Property Tax Expense
539	Miscellaneous Expense
710	Interest Expense

Labels and Amount Descriptions

Labels
For Period February 3-28
For the Year Ended February 28
Amount Descriptions
Balances after payment of liabilities
Balances after realization
Balances before realization
Capital additions
Cash distributed to partners
Final balances
Less partner withdrawals
Net income for the year
Payment of liabilities
Receipt of deficiency
Sale of assets and division of loss

Statement of Partnership Liquidation

1. Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash distributions, divisions of loss), use a minus sign. If there is no amount to be reported for items (a) - (d), the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering "0".

Gerloff, Chu, and Jewett

Statement of Partnership Liquidation

1		Cash +	Noncash Assets =	Liabilities +	Capital, Gerloff (2/4) +	Capital, Chu (1/4) +	Capital, Jewett (1/4)
2
3
4
5
6
7
8	Balances
9
10

Journal

2. Assume the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency. Journalize the entries on Feb. 28 to (a) allocate the partners deficiency and (b) distribute the remaining cash. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6

Instructions After the accounts are closed on February 3. prior to liquidating the partnership, the capital accounts of William Gerloft, Joshua Chu and Courtney Jewelt are $19,580, 54,020, and $22.460, respectively. Cash and noncash assets total $4,980 and $55,980, respectively. Amounts owed to creditors total $14.900. Tho partner share income and losses in the ratio of 2:14. Between February 3 and February 28, the noncash assets are sold for $36,300, the partner with the capital deficiency pays the deficiency to the partnership, and the fablies are paid Required: 1. Prepare a statement of partnership liquidation, indicating the sale of assets and donofos, (b) the eyment of Notes, (c) the recept of the deficiency (from the appropriate partner), and (d) the distribution of cash. Refer to the fate of Labels and Amount Descriptions for the exact wording of the answer choices for rent entries. For those boxes in which you most enter subtracted or negative numbers (balance defoncies, payments, cashbutions, ditions of use a bus were no amount to be mported for me (s)-(), meco can be left blank. However, in the balance rows, balance of reru MUST be indicated by every 2 Assume the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency Joumaize the entries on Feb. 29 to (w afocate the partner's deficiency and (b) distribute the remaining cash. Refer to the Chart of Accounts for exact wording of account titles CHART OF ACCOUNTS Gerloff, Chu and Jewett General Ledger ASSETS 110 Cash REVENUE 410 Revenues 610 Interest Revenue 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable 115 Notes Receivable 116 Inventory 117 Supplies 118 Office Supplies 119 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Equipment 126 Accumulated Depreciation Equipment 129 Asset Revaluations 133 Patent EXPENSES 510 Cost of Merchandise Sold 520 Salary Expense 521 Advertising Expense 522 Depreciation Expense-Building 523 Depreciation Expense-Equipment 526 Repairs Expense 529 Selling Expenses 531 Rent Expense 533 Insurance Expense 534 Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Property Tax Expense 539 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 211 Salorios Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 William Gerloff, Capital 311 William Gerloff, Drawing 312 Courtney Jewett, Capital 313 Courtney Jewett, Drawing 314 Joshua Chu, Capital 315 Joshua Chu, Drawing Statement of Partnership Liquidation 1. Prepare a statement of partnership Aquidation indicating (a) the sale of assets and division of loss, (b) the payment of Rabitos. (c) the receipt of the deficiency from the appropriate partner), and (d) the distribution of cash. Refer to the lists of Labets and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash disebutions, divisions of loss), use a minus sig. Mere is no amount to be reported for toms (a)-(d). the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering o Gerloft. Chu, and Jewelt Statement of Partnership Liquidation (Label) Capital Chu (1/4) Cash Noncash Assets Llabilities Capital, Gerloff (2/4) Capital lewett (1/4) 777 5 7 Balances 10 Journal 2. Assume the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency, Journalize the entries on Feb. 28 to (a) allocate the partner's deficiency and (b) distribute the remaining cash. Refer to the Chart of Accounts for exact wording of account Alles PAGE 10 JOURNAL ACCOUNTING EQUATION DESCRIPTION DENT POST: REF CREDIT ASSETS DATE LIABILITIES EQUITY 9 2 1 +